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City Council will ask Longmont voters for fiber-optic bonds

By Scott Rochat Longmont Times-Call

Posted:
07/24/2013 08:34:26 AM MDT

Updated:
07/24/2013 08:39:31 AM MDT

LONGMONT -- Fast fiber funding will be on the ballot.

The City Council voted 7-0 at a little past midnight Tuesday night to have electric bonds pay for a citywide fiber-optic rollout. The move requires voter approval but would allow everywhere in Longmont to have access to the city's high-speed fiber loop in three years.

"I trust the citizens of Longmont," Mayor Dennis Coombs said. "They supported us once in a vote, and I am not afraid to go back to them again."

The first vote came in 2011 when residents gave Longmont the power to directly offer service on the loop, setting aside a state restriction. About 61 percent of voters supported the move, despite an expensive opposition campaign heavily supported by the Colorado Cable Telecommunications Association.

At the time, the city had hoped to find a private partner to work with. But after no partner came forward, a business plan this year recommended going it alone as a new city utility.

That had Councilman Brian Bagley a little leery. He supported the rollout, he said, and would be voting for the bonds because he trusted the ability of Longmont Power & Communications to do this -- but he was also conscious that most new businesses fail.

"We're again a government playing in the private world of capitalism," Bagley said. "What if we don't know what we're doing?"

City Manager Harold Dominguez noted that even if voters approved a bond, the city could still take on a partner. If it passes, he said, the city would have a pretty good idea of how big a piece of the market it could get. And implementation wasn't a huge risk, he said, because the city already knew it could provide the service; it had been doing so for itself, the school district and a few other large users for years.

"Based on the information we've received, yes, we can do it," Dominguez said.

The old fiber optic cable used by the City of Longmont. (Times-Call photo illustration)

Councilman Gabe Santos said the same questions were probably raised when the city started its own electric utility in 1912, a utility that currently offers some of the lowest rates in Colorado. With or without the bonding, he said, the voters had already given the city permission to get to work.

"If it doesn't pass, we're still going to roll it out," he said. "It's just going to take a long time. We have established the right to do this."

The question of how to do it was the one on the table Tuesday night. Finance director Jim Golden presented three options: sales tax bonds, utility bonds, or "certificates of participation." COPs don't require a vote but have to be backed by city buildings as collateral; sales tax bonds could be approved at any November election, while a utility bond election could be scheduled at any time.

Former mayor Bryan Baum urged the council to pursue COPs, in order to complete the project as quickly as possible.

"I think it's something we've been looking forward to for a long time," he said. "Any way we go, we're pledging the full faith and credit of our city. Do we want to put this off or do we want to make a decision?"

Others weren't as sure. Former mayor Roger Lange said that since the council had already decided to pursue COPs to help the Twin Peaks Mall renovation, using the certificates for both projects would add up to $70 million of commitments -- enough to require every city-owned building in Longmont as collateral. Both he and former city manager Gordon Pedrow called for bond funding instead.

Pedrow went back to the original question-and-answer section that the council received in 2011 before putting fiber optics on the ballot. In an underlined, bold-face statement, the city staff had written "If Council directed a project that required significant investment by the city, and thus a bond issue to move forward, a citizen vote would still be required before the project could advance."

"I urge you to trust the citizens and let us vote on revenue bonds," Pedrow said.

Council members said they wanted to see the issue put on the ballot this November. A formal ballot measure will be brought to the council for approval in August.

If passed, the city would bond about $44 million -- $35.4 million for the capital costs and the rest for interest, issuance costs and a debt-service reserve. If revenues from the new fiber-optic utility fell short of projections, electric revenues could be used to help repay the bonds.

LPC's business plan, reviewed in May, projected a 35 percent market share for the city, meaning about a third of telecom customers in Longmont could be expected to leave the private providers and come to LPC instead.

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